New Social Dominance Matrix Makes it EASY to Find Short-Term Altcoin Reversals!

You may have used Santiment's Activity Matrix, which we were proud to release back in October, 2023 and discuss in this article. That model was used to easily spot which cryptocurrencies were suddenly getting incredibly active (or inactive) compared to their own regular rate of activities.

Inspired by the positive community feedback of that model, we wanted to make another model that focuses more on the social end, and particularly addresses short-term spikes in interest by the crowd.

We have discovered many correlations between an asset suddenly getting a high level of crowd interest, and the price of the asset suddenly reversing course. There are plenty of reasons for a project to suddenly start seeing a big increase in crowd interest. An airdrop, new exchange listing, or adoption by a major corporation are a few of these reasons. But it's no secret that the vast majority of the time, crowd interest spikes when an asset's price suddenly decouples from the rest of the crypto pack.

Yes, decoupling more often than not will happen due to the project jumping well ahead of other coins during a given period of time. But every once in a while, it will decouple in the opposite direction due to FUD or some sort of negative news story.

So how does this all play into analyzing crypto assets through a metric known as social dominance? Well, every coin has a 'share' in the overall discussions of all coins at any given time. Bitcoin, during any given time, nearly always gets the most. When BTC is really being discussed at a high level, such as when ETF's were approved by the SEC back in January, we may see 35% of all coin discussions revolving around BTC.

A meme coin like Dogwifhat, on the other hand, may only get lots of discussion when its price is spiking or falling rapidly so that traders can take advantage of the volatility. When it's really taking off, we may see WIF get talked about around 2.5% of all coin discussions at a given time.

Now, we're not going to accomplish much by putting all coins on the same playing field. Think of each coin as having its own set average level of discourse on an hourly or daily basis. Even when the altcoiners are euphoric about a given meme coin, it practically will never come close to having the same share of discussions as Bitcoin would have on even one of its lower times.

Therefore, we have created a model that measures when a coin is seeing way MORE or way LESS than its normal level of discussions. And we do it by looking at time intervals of just 2 hours at a time, so you can take advantage of a sudden crowd FOMO or FUD spike at any given time. As we have discussed many times in our insights, markets typically move the opposite direction of the crowd's expectation.

So with that explanation out of the way, behold a screenshot of Santiment's new Social Dominance Matrix below. In this case, you are looking at the MINI version, which tracks the prices and social dominance heat map of the top 60 coins by market cap:

The colors may look a bit overwhelming at first, but it is incredibly intuitive. Each coin is listed in the top row, with 8 rows below it listed vertically. They are:

  • Market Cap Rank: The overall rank of the coin by market cap size
  • Price 4-Hour: The price difference of the coin over the past 4 hours
  • Price 1-Day: The price difference of the coin over the past 24 hours
  • Price 3-Day: The price difference of the coin over the past 72 hours
  • 6-8 Hours Ago Social Dominance (Red = a lot of discussion compared to the coin's average, Blue = very little discussion compared to the coin's average)
  • 4-6 Hours Ago Social Dominance (Red = a lot of discussion compared to the coin's average, Blue = very little discussion compared to the coin's average)
  • 2-4 Hours Ago Social Dominance (Red = a lot of discussion compared to the coin's average, Blue = very little discussion compared to the coin's average)
  • Most recent 2 Hours Social Dominance (Red = a lot of discussion compared to the coin's average, Blue = very little discussion compared to the coin's average)

If you're looking for the most recent outliers, which are likely going to be the most useful for reacting in real-time to any social anomalies out there, you can look at the bottom (9th) row for each coin. If you see a bright red cell in the most recent 2 hours of social dominance, then one of three things have a high probability of occuring with that coin:

  • The price of the coin has been pumping, and the crowd is FOMO'ing into it. This means a local top is likely forming, and you can often capitalize by shorting the coin temporarily until the crowd hype dies down.
  • The price of the coin is flat, but the crowd is talking about it because of positive/negative news, or trading groups are hyping it up. More often than not, a big social dominance spike for a coin that has been flat is going to increase the odds of the coin pumping, so you can long and see if you can catch the beginning of a pump.
  • The price of the coin has been falling, and the crowd is showing FUD. This means a local bottom is likely forming, and you can often capitalize by longing the coin temporarily until the crowd fear dies down.

And if you're a serious altcoin fanatic, we have the FULL version of the Activity Matrix that covers 358 of the largest market cap projects in crypto:

The above explained color coding on the FULL version works in the exact same fashion, but we strongly advise you to have a paid Google Suite account if you'd like to have all the data load. This is a data-intensive model, and you can expect 10-15 minutes of load time every time you refresh it.

We should also mention that the matrix view above is on the 'Detailed' tab, which is the leftmost tab that you'll be met with when you first open the model. But to dive straight into the numbers and get more of a table view, go to the second tab over called 'Table'. You'll be met with a table that looks like this:

Here, you can sort by price changes for 4 hours, 1 day, and 3 days to quickly find the coins that have had the biggest decouplings in either direction.

More importantly, you can also instantly sort all the coins in a leaderboard fashion to make your hunt for social dominance outliers a breeze. In the far right column labeled 'Social Dominance 2-Hour vs. Avg', try sorting by Z to A (descending). Scroll down past the blanks (which occur when the coin just isn't getting any notable social dominance... there is no way to get these to go to the bottom on Google Sheets for now).

But as soon as you find real numbers, you'll see the coins that are having the BIGGEST social dominance divergence from its normal average, calculated by percentage.

For example, if Dogecoin normally gets 1.0% of the entire share of discussions in crypto, but in the past 2 hours it's getting 8.0% of the entire share of discussions in crypto, then the far right column will display '800.0%', indicating that it is getting 8x more than its normal social dominance.

Any percentage greater than 100% on this column means that the coin has recently been getting more discussion than it normally gets. Anything less than 100% means the coin is getting less than it normally gets.

You can make a copy of the FULL or MINI Social Dominance models here: 

Make a Copy of the Social Dominance Matrix FULL model

Make a Copy of the Social Dominance Matrix MINI model

Then, with your freshly made copy of either model, you simply can:

  1. Download Sansheets
  2. Plug in your API
  3. If you're having trouble getting the data to load on a model, head to the 'Data' tab on the far right of the spreadsheet, and go to the yellow cell. Then delete the cell formula, then hit Undo. This should manually refresh the data.
  4. If data still won't load, copy the URL of your model, close the tab, and then paste the URL in a new tab and hit enter

Give it a go, and let us know what you think! What is useful? What can be improved in our 2.0 version?

Stay tuned, and we'll be recording a full walkthrough of this model on the Santiment YouTube channel in the near future. Cheers!


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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